Money laundering is not a victimless crime. It is used to fund terrorists and facilitates drug dealers and people traffickers, as well as a range of other criminal activity. The credibility of solicitors and the services they offer makes them an attractive target for criminals, who want to launder their gains. Solicitors have a vital role - and opportunity - to help tackle the problem.
The creation and administration of trusts and companies on behalf of clients has been highlighted by the government as one of the legal service areas at highest risk of exploitation by criminals. We agree with this assessment and it is reflected in our sectoral risk assessment. We have produced this document to set out information on money laundering and terrorist financing risks that we consider relevant to those we supervise.
Trusts and companies are attractive to money launderers because individuals can:
- obscure the beneficial ownership and control of assets and wealth
- create and control multiple legal entities at a relatively low cost
- create complex and opaque structures
- operate across multiple jurisdictions
- avoid tax or duties.
They are the vehicle of choice for the legitimate investment and business world, however criminals may use them to add a veneer of legitimacy to illegal transactions.
The government is committed to disrupting and stopping money launderers and continuing to develop anti-money laundering (AML) and counter terrorist financing (CTF) requirements to monitor, assess and mitigate the risks posed by these vehicles.
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